Government bonds (CETES, Tesouro Direto, TES & peers)
Low–mid
What it is
You lend money to your own government and get paid interest. In high-interest-rate Latin American economies, this is often the best simple deal a beginner can find — low risk, low cost and, in Mexico and Brazil, buyable directly with no middleman.
How to buy it
Mexico: cetesdirecto.com, from ~100 pesos. Brazil: tesourodireto.com.br, from ~R$30. Colombia, Argentina, Chile and Peru: typically via a mutual fund or a regulated broker rather than a dedicated retail portal — see your country guide for specifics.
Pros
- Generally the lowest-risk instrument denominated in local currency
- Some versions are inflation-linked, directly protecting purchasing power
- Low or no fees where a direct government platform exists
Cons
- Still carries the credit risk of the issuing government, however small
- Selling before maturity can realize a loss if rates have risen since purchase
- Returns are modest compared to riskier instruments — that is the deal
What it actually costs
This is usually the cheapest instrument to own. Mexico's cetesdirecto and Brazil's Tesouro Direto were built as public-access channels: cetesdirecto charges no purchase commission, and Tesouro Direto carries a B3 custody fee of 0.20% a year, waived on Tesouro Selic holdings up to R$10,000 per CPF. Reaching the same bonds through a private broker instead can add brokerage and custody charges, so compare the total before assuming the routes are equivalent.
Who it suits, and who it does not
A good first investment for almost anyone, and a reasonable permanent home for the conservative part of a portfolio at any age. Short-term or floating-rate government paper also works for money you may need within the year. What it does not do is grow wealth aggressively — over decades, a portfolio made only of government bonds tends to preserve purchasing power rather than multiply it.
A worked example
Buying a short-term bond like a 28-day CETES or a Tesouro Selic position is close to the calmest way to put idle cash to work at close to the policy interest rate, with same-country-government credit risk and daily liquidity in Tesouro Selic's case.
Common mistakes with this instrument
- Assuming there is no price risk: only floating-rate paper is designed to be sold early without surprises, while fixed-rate and inflation-linked bonds move with market rates until maturity.
- Reading an annualised rate as the return for the actual term — a 28-day instrument at 10% a year does not pay 10% in a month.
- Choosing a maturity far beyond the date you will actually need the money, then being forced to sell into a bad market.
How to reach it, country by country
Mexico and Brazil both have a direct government retail channel — cetesdirecto and Tesouro Direto — which is why beginners there can start with about 100 pesos or 30 reais. Colombia's TES, Chilean and Peruvian sovereign bonds and Argentine public paper are generally reached through a regulated broker or a fixed-income fund rather than a government-run portal, which makes the fee comparison the important step.
¿Qué es la TPM y cómo afecta al resto de las tasas del sistema? (in Spanish)
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